Riverside OKs higher water, electricity rates

Share this:

Riverside Public Utilities interim general manager Todd Jorgenson shows an example of the cast iron pipe he says will fail in next 20 to 25 years if not replaced. The city has about 200 miles of it.
Photo by Ryan Hagen, The Press-Enterprise/SCNG

Riverside residents will pay higher water rates starting July 1 and higher electric rates starting Jan. 1, the City Council decided in a 4-3 compromise Tuesday, May 22.

Riverside Public Utilities officials had said it was important that both increases, which will cost the average customer about $3.10 more per month for electricity and $3.50 more per month for water in the first year, start July 1.

But after hearing by email and in person from scores of residents who said the new rates were unaffordable, council members decided to delay the electric increase for six months to give people more time to prepare and to avoid the hot summer months.

The delay in raising electric rates was workable but would probably mean cutting back on some planned projects, while a delay in the water rate increase would mean too much risk, said Todd Jorgenson, the utilities’ interim general manager.

Council members voted 5-2 in January to give “conceptual approval” to the same increases — both starting in July — with Councilmen Chuck Conder and Steve Adams saying residents couldn’t afford the cost and that the utilities didn’t need it.

Sign up for The Localist, our daily email newsletter with handpicked stories relevant to where you live. Subscribe here.

Councilman Mike Soubirous joined them in voting no on Tuesday. He said officials should spend more time trying to convince residents that the increase was necessary.

Nearly two dozen Riverside residents spoke for and against the plan Tuesday in a discussion that took more than three hours. Multiple public meetings were held before.

Ana Miramontes, president of the La Sierra Business Council, told the council it was important to pass the increases.

“We live in a beautiful historical city and with that comes the responsibility to take care of the infrastructure,” she said.

The new rates are a 2.95 percent increase for electric rates and 4.5 percent for water rates in the first year. Further increases are planned for the next five years — averaging 3.0 percent per year for electricity and 5.7 percent annually for water — but will be reviewed by council members each year.

At the end of five years, rates for water and electric will still be lower than competitors such as Southern California Edison and Western Municipal Water District, Jorgenson said.

Pointing to a cast-iron pipe with half the metal gone, Jorgenson said the rise in rates is necessary to prevent pipes put in shortly after World War II from bursting. The city has about 120 miles of cast-iron pipes that are expected to break in the next 20 to 25 years, he said.

Revenue from the increase is essential to pay for infrastructure, renewable energy and utility operation costs, as well as to maintain strong bond ratings and low debt costs, he said.

The increases are expected to bring in an average of $35 million more for each of the next five years.

In response to concerns about affordability, the utilities also expanded the eligibility for its program to help low-income residents. The program will now be available to anyone who makes up to double the federal poverty guidelines — up to $50,200 for a family of four — and includes utility payment assistance of up to $345 per 12-month period.

At least 20 members of the public submitted cards indicating they wanted to speak on the proposal, Mayor Rusty Bailey said. Roughly half urged a vote for it and half urged a vote against it. Many of those supporting the plan were members of the city’s utility commission, Greater Riverside Chambers of Commerce or other civic groups.

Before those comments began, Adams said the utilities’ financial problems began when the state required less use because of the state drought.

“The city of Riverside was not in a drought,” Adams said. “It was a farce.”

Adams asked that the rate increases be delayed until newly appointed City Manager Al Zelinka “has his legs under him,” a new general manager for the utilities is in place and an independent audit is conducted on the utilities.

Jorgenson responded to the suggestion that the utilities were mismanaging and needed an audit by pointing to previous audits that found no current problems and to the high credit ratings for both utilities. Only one public power enterprise has a higher rating than Riverside’s — Pasadena — while S&P gives the water utility its highest rating, AAA.

Critics also pointed to the practice of transferring 11.5 percent of utility revenue directly to the city for general services such as police, fire, parks and libraries, which is the maximum allowed by the city charter.

The portion of each payment that’s going to the general fund will now be noted on each month’s bill.

The city’s $411 million reserve also led to skepticism that increases were necessary.

“How did RPU accumulate such a large reserve if they were not overcharging us for the last seven years?” resident Mary Humboldt asked.

Of that reserve, all but about $189 million is dedicated to specific projects or legally restricted, and about one-third of that will be spent over the next five years, Jorgenson said. The reserve policy is consistent with similarly rated utilities, he said.

The city’s utility commission, which signed onto both increases May 14, will have to vote again on whether to increase the electric rates in January. That’s because the city’s policy requires the commission and the City Council to both approve any plan before it goes into effect.

Ryan Hagen covers the city of Riverside for the Southern California Newspaper Group. Since he began covering Inland Empire governments in 2010, he's written about a city entering bankruptcy and exiting bankruptcy; politicians being elected, recalled and arrested; crime; a terrorist attack; fires; ICE; fights to end homelessness; fights over the location of speed bumps; and people's best and worst moments. His greatest accomplishment is breaking a coffee addiction. His greatest regret is any moment without coffee.